BUYING OR REFINANCING A VETERINARY PRACTICE? THE 411
If you’re thinking about buying a veterinary practice, there’s a few things you should know. There are a whole host of financial products out there to support you and your bank account.
Commercial Mortgages
If you’re looking at buying an existing veterinary practice, as well as the building, a value is assigned to the business as well as the premises. Once these elements are valued, you will be given a ‘going concern’ value – a combination of the value of the business and the physical premises. Your deposit could be as little as 10% of this ‘going concern’ value. The amount you can borrow under a commercial mortgage will, of course, depend on the predicted profitability of the practice and your ability to keep up with the payments.
A commercial mortgage can range from around 5 to 25 years, dependent on the lender.
Refinancing
If you already own a veterinary practice but need to improve cash flow or raise funds for equipment, refurbishments or new staff – a commercial mortgage could be used to remortgage your current practice.
When refinancing your practice, it could be possible to borrow up to 100% of the property’s value. You could also reduce your interest rate, reduce your total interest charges and secure additional monies – for whatever you need.
Expanding
If you’re looking to purchase another premises and expand your practice, you could get financing for 100% of the value – no deposit required. This is a fairly unique financial bonus of the veterinary industry alone, as most industries are capped at financing of around 80% of the new premise’s value. This, of course, will depend on the likely profitability of the new practice and the strength of your current practice.
If you’d like advice on the varying financial option available to veterinary practices, give a call, check out our blogs or pop us an email. We’d be happy to advise you from our vast experience and exceptional lenders.